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With home values up significantly from what they were a decade ago, many people are considering selling their homes. This a perfect opportunity for us to remind potential sellers that this doesn’t mean the tax savings accumulated over the years will be lost, but only if purchasing a new primary home within two years’ time. Florida’s Save Our Homes provision allows the ability to carry accrued property tax savings from one piece of property to another, up to $500,000. This is what the State of Florida refers to as “portability.”
Anyone who is thinking of either purchasing a larger home or downsizing to a smaller one should consider the potential property tax savings portability may give them. If your new home has a higher market value than the previous one, the portability amount is determined by subtracting the assessed value of the previous home from its current value.
For instance, if the current value of your prior home is $950,000 but the tax assessed value is $550,000, with the portability benefit, the assessed value of your new home will be reduced by $400,000, and the 3% cap will continue on that portion of your new home’s value. If you downsize to a home of lower value, you can still transfer a percentage of the difference from your prior home to your new home. With downsizing, if the new home had a market value of $450,000, the new assessed value would be $260,526 before applying your new homestead benefit of $50,000, then it would be $210,526. In this case transferable “Save Our Homes” portability benefit is $189,474.
It is important to remember that in order to qualify, you must have received a homestead exemption on the previous home and then file for a new homestead exemption. The deadline to transfer the assessment difference is by January 1 of the second year after selling your prior homestead property.
Click below to be directed to Florida Department of Revenue form for filing transfer of homestead assessment difference which must also be filed:
As with any topic or question, we are here to help. Please reach out to us if you’d like to discuss how your individual situation applies.
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